Terengganu sultan ordered halt to RM5bil 1MDB bond issuance but Najib asked to proceed as planned

(FMT) – A former 1MDB director told the High Court in Najib Razak’s 1MDB corruption trial that Terengganu’s Sultan Mizan Zainal Abidin had ordered him to suspend the issuance of Islamic medium-term notes (IMTN) used to secure a RM5 billion loan for the then Terengganu Investment Authority (TIA) state sovereign fund.

Ismee Ismail said that during an audience with the Terengganu Ruler on May 22, 2009, Sultan Mizan told him and former 1MDB CEO Shahrol Azral Ibrahim Halmi to halt the issuance of the bonds “because my interest and concern are for the well-being of my state and my people”.

He said the sultan’s sister, Tengku Rahimah, was also present.

“At that moment, we (Shahrol, Ismee and Tengku Rahimah) did not say anything. I then told Tuanku that ‘your concern is my concern’.

“In my view, if the sultan wanted to suspend the IMTN, we should not question it,” he said.

Previously, Shahrol had testified that he and Ismee had been summoned to Istana Terengganu at Jalan Kia Peng here after Friday prayers.

Ismee told the court they obeyed Sultan Mizan’s orders and signed the documents to suspend the issuance of the bonds.

“As Shahrol and I were walking to our cars after the meeting, he told me the company could not suspend the issuance as 1MDB had already given instructions to Ambank.

“His exact words to me were, ‘We have already pushed the button’. I asked Shahrol why he didn’t raise this during the meeting. His reply was, he wasn’t used to handling such situations,” he said, adding that he then let Shahrol resolve the matter with Ambank.

‘Najib wanted bond issuance to proceed as planned’

Ismee also said he received a call from Shahrol later that evening, informing him that Najib wanted to see them.

“I reached Langgak Duta (Najib’s home) at about 8pm that day. Shahrol had arrived earlier and was in the living room.

“The PM came down shortly to see us, and I briefed him on what happened at the palace meeting,” he said.

He said Najib asked them why they had signed the IMTN suspension.

“His exact words were, ‘Why did you sign it?’ and said we should have informed Tuanku to give TIA more time.

“I said this was Tuanku’s order and we could only abide by it,” he said.

Ismee said Najib wanted the RM5 billion bond issuance to proceed as planned.

The court had heard how TIA initially wanted to develop Pulau Bidong in Terengganu as the state’s new tourism spot. The island used to be the home of Vietnamese refugees from the 1970s to 1990s.

TIA wanted to raise RM5 billion through the IMTN, and Ambank Islamic was selected for the purpose where the bonds would be guaranteed by the federal government.

Najib is standing trial for 25 counts of money laundering and abuse of power over the alleged misuse of 1MDB funds amounting to RM2.28 billion deposited into his AmBank accounts between February 2011 and December 2014.

The hearing before High Court judge Collin Lawrence Sequerah continues.